This is a fairly new category of bond funds that has been discussed a little on this foreum. The basic idea is a bunch of bonds that have a defined maturity (usually December) in a certain year, 2025, 2026 etc. So on the designated date, the fund closes and returns all proceeds to the investors. These are ETFs that can be bought and sold anytime, but the general idea is to hold until maturity, i.e. the close of the fund. Such bond funds would seem to be particularly suited to laddering.
I'm interested in the municipal offerings from Invesco and Black Rock. The return from Invesco looks a bit better now than Black Rock, but neither has much of a history. However, with the Vanguard Municipal Money Market currently yielding more than 3.5%, I do not plan to buy any of these bond funds until municipal money market rates have dropped to around 2.5% or so.
Any pros or cons from the Boglehead community on this relatively new category of bond funds? Have any of you had a good or bad experience with the defined maturity category of bond funds?
I'm interested in the municipal offerings from Invesco and Black Rock. The return from Invesco looks a bit better now than Black Rock, but neither has much of a history. However, with the Vanguard Municipal Money Market currently yielding more than 3.5%, I do not plan to buy any of these bond funds until municipal money market rates have dropped to around 2.5% or so.
Any pros or cons from the Boglehead community on this relatively new category of bond funds? Have any of you had a good or bad experience with the defined maturity category of bond funds?
Statistics: Posted by Van — Thu Jul 04, 2024 4:34 pm — Replies 8 — Views 390